Correlation Between Saigon Beer and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Vietnam Rubber at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saigon Beer and Vietnam Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Beer Alcohol and Vietnam Rubber Group, you can compare the effects of market volatilities on Saigon Beer and Vietnam Rubber and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saigon Beer with a short position of Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Vietnam Rubber.
Diversification Opportunities for Saigon Beer and Vietnam Rubber
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Saigon and Vietnam is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group and Saigon Beer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saigon Beer Alcohol are associated (or correlated) with Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Saigon Beer i.e., Saigon Beer and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Saigon Beer and Vietnam Rubber
Assuming the 90 days trading horizon Saigon Beer Alcohol is expected to generate 0.61 times more return on investment than Vietnam Rubber. However, Saigon Beer Alcohol is 1.65 times less risky than Vietnam Rubber. It trades about 0.06 of its potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.01 per unit of risk. If you would invest 5,018,182 in Saigon Beer Alcohol on November 3, 2024 and sell it today you would earn a total of 361,818 from holding Saigon Beer Alcohol or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saigon Beer Alcohol vs. Vietnam Rubber Group
Performance |
| Timeline |
| Saigon Beer Alcohol |
| Vietnam Rubber Group |
Saigon Beer and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and Vietnam Rubber
The main advantage of trading using opposite Saigon Beer and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Vietnam Rubber can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vietnam Rubber will offset losses from the drop in Vietnam Rubber's long position.| Saigon Beer vs. FIT INVEST JSC | Saigon Beer vs. Damsan JSC | Saigon Beer vs. An Phat Plastic | Saigon Beer vs. APG Securities Joint |
| Vietnam Rubber vs. FIT INVEST JSC | Vietnam Rubber vs. Damsan JSC | Vietnam Rubber vs. An Phat Plastic | Vietnam Rubber vs. APG Securities Joint |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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